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Deceleration In Cyprus Residential Property Price Index

by THEFUTURE.TEAM

July 17, 2024

The Central Bank of Cyprus (CBC) recently reported a deceleration in the Residential Property Price Index (RPPI) for Q1 2024. This trend highlights a noteworthy shift in the property market, attributed to a normalisation in demand coupled with increased supply and elevated interest rates. Such factors are pivotal in understanding the dynamics of the current real estate landscape in Cyprus.

Quarterly and Annual Trends

The RPPI, which tracks changes in property prices across flats and houses, increased by 1.6% in Q1 2024, following a 2.3% rise in the previous quarter. Specifically, house prices rose by 0.8%, while flat prices surged by 3.4%. On an annual basis, the RPPI saw a 7.8% increase compared to Q1 2023, with flat prices up by 13.9% and house prices by 4.7%.

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District-Specific Changes

The deceleration was not uniform across Cyprus. Pafos and Famagusta districts experienced accelerated house price increases of 3.1% and 4.4% quarterly, and 11.2% and 11.8% annually, respectively. In contrast, Nicosia, Limassol, and Larnaca saw slower quarterly growth of 0.2%, 1.5%, and 2.2%, respectively, with annual increases of 4%, 9.2%, and 10.7%.

Flat prices exhibited a similar pattern. Quarterly, Nicosia recorded a 0.8% rise, Limassol 3.7%, Larnaca 4.3%, Pafos 3.5%, and Famagusta 10.7%. Annually, Limassol, Larnaca, and Famagusta showed significant increases of 16.5%, 18.1%, and 16.5%, while Nicosia and Pafos noted more moderate rises of 5.1% and 21.4%.

Economic Implications

This deceleration signals a potential shift towards a more balanced market. The combination of stabilised demand, increased supply, and the high cost of borrowing due to rising interest rates are crucial factors. Additionally, the minor reduction in construction material costs, despite remaining high, impacts overall market dynamics.

Looking Ahead

The CBC’s caution about future deceleration reflects broader economic concerns. As interest rates continue to rise, the affordability of mortgages may further influence demand. Additionally, the construction sector’s response to material costs will be critical in shaping future supply levels.

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Industry Uproar Over Reduction in Electric Vehicle Subsidies

by News Editor

April 26, 2025

The recent move by the government to curtail subsidies for electric vehicles has stirred significant discontent among car importers in Cyprus. The Department of Road Transport (DRT) has slashed available grants under the Electric Vehicle Promotion Scheme as of April 23, leading to a rapid depletion of the subsidy pool and leaving many potential applicants disappointed.

Importers’ Concerns

According to the Cyprus Motor Vehicle Importers Association (CMVIA), the lack of transparency and failure to engage stakeholders prior to the decision have eroded trust in the government’s commitments. Importers now find themselves facing a precarious situation, with substantial stocks of electric vehicles and mounting promotional expenditures.

Public Interest and EU Compliance

Although the scheme aimed to support the transition to zero-emission transport until 2025, the DRT states that the curtailing of funds was necessary to comply with European funding terms, which warned against delays in vehicle deliveries. This decision has fueled market uncertainty despite the application portal experiencing dynamic changes.

Industry’s Ongoing Demand

The CMVIA refutes any claims suggesting waning interest in electric vehicles, underscoring the rapid exhaustion of available grants as proof of substantial demand. They highlight the importance of meeting Cyprus’s green transition targets, including putting 80,000 electric vehicles on roads by 2030.

While the total budget for subsidies saw an increase to €36.5 million in 2023, thanks to additional funding, ongoing difficulties in timely vehicle distribution have led to premature closures of applications. In response, CMVIA has called for urgent dialogue with the Minister of Transport to reassess the decision, fearing that it could endanger the future of e-mobility in Cyprus.